Automakers are increasingly open to collaboration with rivals and technology companies as they begin to seriously address the enormous challenge of abandoning the internal combustion engine to tackle the climate crisis. The investment needed to develop electric cars helped trigger a wave of partnerships, with companies coming together to spread the costs.
Baidu’s carmaker will focus on passenger vehicles and will operate as an independent subsidiary, according to its statement on Monday. Baidu will also use its artificial intelligence resources and mapping systems.
Volvo owner Geely said in its statement that the company is trying to transform itself from a car manufacturer into “a technology company” focused on “smart electric transport”.
No further details were released on the partnership.
Geely’s shares hit a record high on Monday, before closing down 2.6%. The stock soared nearly 20% on Friday, its best day since November 2008, after Reuters said the company would join Baidu.
Baidu’s stock closed higher on Wall Street last Friday, up 16% to $ 240.25.
Jill Disis contributed to this report.